But as China's natural resources shortages become more acute, the risk of paper losses fades in importance. According to the Chinese Society for Metals, the country currently relies on imports to meet 70 percent and 50 percent of its copper and iron ores needs, respectively.

Chinalco's capital injection also could help stop Rio Tinto's share price from further drops and curb its own mounting book losses, Xu added. The Australian company's share price in London rebounded to around $25.20 per share when the deal was announced on February 27.

Through the deal, Chinalco could sharpen its competitive edge in global minerals markets, said a recent report by China International Capital Corp. Ltd., a joint venture investment bank based in Beijing. It also would gain from the expertise of a world-class management team since it would receive two seats on Rio Tinto's board of directors, the report said.

"We pursued those Australian assets with a view to creating sustainable financial returns and internationalizing our businesses," said Xiao Yaqing, former General Manager of Chinalco, in a statement. Xiao was in charge of the negotiations with Rio Tinto until he was transferred to the State Council as Deputy Secretary General on February 17.

"We do not see the first investment in Rio Tinto as a misstep despite a sharp fall in its share prices since it paved way for the second one," Xiao said. "We are not worried about paper losses as the share prices cannot reflect the true value of the key resources which are becoming ever more precious as time goes by."

Xiao also played down speculation that a tie-up with Rio Tinto would give China more bargaining power in iron ore price talks with Australian miners.

"The prices will still be decided by global supply-and-demand relations," he said. "Many foreign companies have owned stakes in Australian mines, but they still have had to accept the price hikes in recent years."

Overseas Investments by Chinalco

March 2007: Chinalco reached a $2.92-billion deal with the government of Queensland, Australia, to develop the Aurukun bauxite-mining project.

August 2007: Chinalco bought Canadian mining company Peru Copper Inc. for $860 million.

February 2008: Chinalco paid $14 billion for 12 percent of Rio Tinto Group's London-listed shares, equivalent to 9 percent of the group.

May 2008: Chinalco signed an agreement with Peru Copper Inc. to exercise an option to develop the Toromocho mining project in the Andean country.